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The men the American people admire most extravagantly are the most daring liars, the men they detest most violently are those who try to tell them the truth. -- H.L. Mencken

"Only a man who knows what it is like to be defeated can ... come up with the extra ounce of power it takes to win." - Muhammad Ali

"When plunder has become a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it." -- Claude Frédéric Bastiat

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But the fundamentals really do give a funny mental number when comparing the fair value of the S&P500 to earnings. That is because according to the estimates created by Standard and Poor, earnings are about to go negative for the first time in the history of the index. Certainly not bullish information, anyway.

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Oops. lost count. Was looking at bases on the ID charts rather than days. That should be 4/4, though Tuesday was kind of Neutral.

Nope. Tomorrow at this time Chunky Sue Hererrawill be saying "Profit takers came into the market today"Every day the market goes down they trot that one out.The scam week damage has already been inflicted.When the market was trading at 870 a couple of weeksago one of the Lost Money guys said that someonewith deep pockets came in and bought 100000 880 Callson the S and P. Tip of the cap to that guy. He'll havethe nicest rental at the Hamptons this summer.

“A million seconds is 11.5 days. A billion seconds is about 32 years. A trillion seconds is 32,000 years."

The funny metals approach to the price of gold supposes a global return to the gold standard. If it was based on global M1 the price of gold should be about $1,400/oz, and if it was based on M2 it should be about $7,800/oz. On the chart below, the next resistance line corresponds to about $3,000/oz and a 1980 style blowoff to the top of the channel corresponds to $5,000/oz.

The ratio graph below is based on monthly average prices. A move to the red oval is a SP500/gold ratio of 0.28. If we retest the SPX lows of 666 and post that price on average for a month, this ratio equates to a gold price of about $2,400/oz. On the other hand, if gold only gets to the M1 fundamental price of $1,400/oz, then this ratio equates to an S&P 500 value of about 400.

The ultimate price low for the S&P500 depends on the maximum deflation point; and the price high for gold depends on the maximum inflation point. Both depend on how much the Fed prints. But the ratio graph should look the same regardless.

I am currently long GLD and SLV, and short SPY. My price target for gold is a minimum of $1,400, and for SPY it is a retest of the lows already seen. Gold could go higher (inflationary outcome) and SPY could go lower (deflationary outcome) but that is harder to target.

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The price of gold relative to oil reached an extreme back in February, but it has since corrected to the middle of the channel which is often a reversal point. If we assume oil stays about where it is ($70) which is reasonable from a consumption/production viewpoint, then this suggests we are at a reasonable point for gold to resume climbing.

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It pains me to show these next two charts...I hope I'm wrong....I really do....bearz

"It's tough to make predictions, especially about the future" Yogi Berra
"If you believe people are rational beings, you will go through life frustrated and confused" Scott Adams
"Don't dig the dialog of denial"
"No, I don't know that atheists should be considered as citizens, nor should they be considered as patriots. This is one nation under God." George W. Bush

don't think its safe for the bears until the traditional sept/oct panic or SPX close under 900, whichever comes first

lots of bear tragedy on boards this week...

place your bets...something for both bears and bulls...from sentimentrader.com:

There have only been six other days since 2002 that the STEM.MR Model has dropped under 10%. Those were:

* 01/03/03 (the market dropped soon afterward)

* 12/18/03 (a kickoff to a major thrust higher)

* 10/27/04 (a kickoff to a major thrust higher)

* 07/08/05 (the market rallied for another couple of weeks before rolling over)

* 12/26/07 (the market rolled over immediately)

* 01/05/09 (the market rolled over almost immediately)

There wasn't much in-between about these occurrences - either the market rallied strongly without much of a blip over the next couple of weeks at least, or it rolled over within a day or two and suffered pretty hefty losses.

Sure glad all my albums went GOLD."Ferdy-bee-bee-dee-ferbs."Subscribe & Earn Karma Miles with Every Visit!Rule #5 Professional Exemption.Blind Follower, Just Think Positive Hyperinflation, I Get Paid 500 Quadrillion Dollars/Hour at 1000% Interest/Hour Compounding Forever Each Mouse Click Religion."I too observe 'flation.'"I love you, TASR!YOU MAKE KITTY SCAREDTops Take TimePostulate A Free Lunch EconomyAnyone, now, who is not genuinely afraid is a moran.[T]housands of empty stucco crapboxes vacated after being circle-jerk sham-traded among corrupt borkers, uppraisers and loan officers from 100K up to 800K, then "nopay-walkaway" (with dirty loan cash in pockets)Guess again, girlfriend.Or, $2.7 million every effing day since the effing pinball machine.Permabear Hysterian